The future of Norit after Cabot offloads following disapointing decade
Global chemicals manufacturer Cabot Corporation is offloading its Norit activated carbon business for $111 million – a fraction of the $1.1 billion it paid to acquire the business back in 2012.
Norit manufactures a broad portfolio of activated carbon products used for purification needs in growing sectors including renewable natural gas, food and beverage, chemicals, pharmaceuticals, air quality, water, and automotive. The Company operates two plants in North America, five facilities in Europe and participates in three joint ventures in Canada, Asia and Mexico.
Cabot has agreed to sell Norit – a leading provider of activated carbon products for water treatment applications – to One Equity Partners, after openly exploring strategic options for the business over the past several years. One Equity Partners (“OEP”) is a middle market private equity firm focused on the industrial, healthcare, and technology sectors in North America and Europe. The firm builds market-leading companies by identifying and executing transformative business combinations. OEP is a trusted partner with a differentiated investment process, a broad and senior team, and an established track record generating long-term value for its partners.
After acquiring Norit from private equity in 2012, Cabot was forced to recognise significant impairment charges related to the transaction – including a $352 million goodwill impairment in 2015 – which it largely attributed to lower than anticipated growth in air purification applications for mercury removal at coal-fired power plants.
Norit (reported as Cabot’s Purification Solutions segment) generated $26 million of EBITDA on revenues of $257 million in the year ended 30 Sepember 2021. Norit was generating annual sales of $360 million when Cabot bought it in 2012.